Senate To Investigate N9.3tr Spent On Petrol Subsidy In 30 Months

Yesterday, the 10th Senate opened its first full day of action by announcing an intention to investigate the concerns surrounding the payments made for gasoline subsidies.

Senate asked Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), to advise it on the under-recoveries that the Federal Government had experienced.

The Senate recommended that, once it is established, the Ad hoc Committee on Petroleum (Downstream) shall continually monitor, scrutinize, and approve Midstream and Downstream spending by the NNPCL. This recommendation was made by the Senate.
It advised the Nigerian National Petroleum Corporation Limited (NNPCL), in partnership with a few international oil companies (IOCs), to organize three distinct consortia and build three refineries in order to stabilize the oil market in the nation, give value to the Naira, and maintain economic stability.

Also yesterday, Kyari stated that the oil giant spends N400 billion naira monthly providing petrol subsidy while speaking at another gathering in Abuja. In addition, the Senate made a request for a living wage to be paid to workers as a means of mitigating the negative consequences of the loss of subsidies.

Following the deliberation of a proposal brought forward by Senator Ndubueze Chinwuba, these resolutions were proposed. This motion was given the title "Need to Investigate the Controversial Huge Expenditure on Premium Motor Spirit (PMS) under the Subsidy/Under Recovery Regime by the Nigerian National Petroleum Company Limited (NNPCL)."

Ndubueze, as the person in charge of the debate, expressed his admiration for the action done by President Tinubu about the subsidy.
He argued that despite the fact that the Federal Government, through NNPCL, claimed an under-recovery amount of N170 billion over a period of ten years (2006-2015), the government spent N843.121 billion on under-recovery between January 2018 and January 2019.

"Very worrisome are the expenses made on subsidy/under recovery by NNPCL during the period under review," the legislator stated, "particularly from January 2021 to June 2023 when it was claimed that N9.3 trillion was spent."According to the figures that are now accessible, N1.42 trillion was spent in 2021, N4.3 trillion was spent in 2022, and N3.6 trillion was spent in the first six months of 2023, for a grand total of N9.3 trillion.

A significant number of Senators disapproved of the fictitious costs that NNPCL incurred during the subsidy program and agreed with all of the prayers that were included in the motion.
In light of this, the Senate came to the conclusion that, whenever they are established, the committees on Petroleum (Downstream), Petroleum (Upstream), and Finance should look into the issue of subsidy payments and the under-recovery system.

In his ruling on the motion, the President of the Senate, Godswill Akpabio, said the following: "We commend President Tinubu for the decision to remove fuel subsidy." The President's demonstration of bravery has sparked a lot of excitement among us. It was a choice that needed to be made, and we are grateful that it was made during the period that the 10th Senate was in office.In addition to this, we are looking forward to the palliative care that will be provided. NNPCL reportedly "spent 400 billion months."

Also Read: Petrol Subsidy Removal Not Immediate — Presidency Source

The Nigerian National Petroleum Corporation Limited (NNPCL) praised President Bola Tinubu Wednesday for withdrawing the subsidy, noting that the program was costing the Federal Government N400 billion each month. Before its repeal 44 days ago, the policy was referred to as the "worst challenge" Nigeria had to face, according to the report.

"The issue of subsidy on PMS (Premium Motor Spirit) was the source of the greatest difficulty that we have encountered in this country over the past 45 years." According to Kyari, who is currently speaking at the Nigeria Oil and Gas (NOG) conference that is taking place in Abuja, it costs around to N400 billion every month to smoke cigarettes.

Yesterday in the Senate, senators praised Tinubu for eliminating the subsidy regime while also resolving to investigate the N9.3 trillion that has been spent on it (the subsidy) over the course of the previous 30 months and the under-recovery by the NNPCL.

Kyari, who presented a paper titled "Redefining Nigeria's Energy Landscape for a Sustainable Energy Future," noted that Nigeria's ranking was already improving as a result of the removal of subsidies and the floating of the Naira.

Additionally, he discussed the NNPCL's plans to go public, dispose of part of its assets, and increase the quantity of gas that is available for both domestic and foreign consumption.

He stated that, "Today, we are happy because of the decision that Mr. President made to eliminate the subsidy." We have successfully circumvented the most difficult obstacle that we faced as a nation.

"And already we are beginning to realize the value. Our national rating is changing. The elimination of subsidies is made easier by the foreign exchange stability that we currently enjoy.

Kyari said that after the subsidy was eliminated, NNPC, just like any other company that was interested in importing gasoline, would source its foreign exchange from the open market. "In the future, NNPCL will no longer have access to simple dollars. If we have any US Dollars, we will convert them at the same market as any of you, therefore there will be no difference in the price. There is really no longer any benefit to us in doing this. At this time, we have access to a completely open market. It is a race for everyone to give as much value as they can. As a result, we anticipate that this market will shift in a way that is beneficial to all of us as well as the nation.

In addition, he reiterated the fact that the majority of international oil companies (IOCs) operating in the country were pulling out of onshore oil production due to the country's unstable political climate.

The CEO of NNPCL gave the stakeholders the following statement in order to reassure them that the government was tackling the issue of insecurity, particularly in the areas surrounding oil facilities: "I am aware that a lot of intervention is going on and the results will be seen very soon."

Kyari encouraged native investors to capitalize on the opportunity presented by international oil companies by entering the onshore oil production market. He also lamented the fact that the NNPCL is hardly ever compensated for the supply of gasoline and gas that it provides.

However, the GCEO continued by saying that the NNPCL will announce its Initial Public Offering (IPO) when it had been quoted on the Nigeria Stock Exchange.

Kyari stated that an appropriate fiscal climate was required for Nigeria to execute on its attractive gas pipeline projects. He attributed the delay of projects in the oil and gas industry to late Appropriation. He stated that at the present time, the NLNG was not supplying enough gas to its users both domestically and internationally. Kyari made the announcement that NNPCL was increasing the capacity of the NLNG by double with the addition of train seven.

He stated, "We are proceeding with our major gas infrastructure project, which involves gas pipelines." When you build a pipeline from Brass all the way to countries in West Africa, into Morocco and beyond, you are promoting integration and fostering economic growth. "But keep in mind that in order to ensure your protection and safety, you need to keep an eye on your neighbors. This is something that is already taking place all across the world. Kyari clarified that there was no impediment to the disposal of onshore properties by Shell Petroleum Development Company caused by NNPCL's involvement.

"NNPC is not holding up any deals in any way. We are in rivalry with others First, the divestment from Shell; I am sure the Shell guys are here, and they are aware that the NNPC did not stop it.

"We will be pleased to see other groups from the commercial sector participate. There are some assets that we will not immediately pursue. In point of fact, you are going to witness assets being transferred out from under the control of NNPCL.


Jenny Young

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Comments
Jonah Ekeh 48 w

Good delivery